Senators Announce Details on Immigration Reform – Changes to H-1B

On Monday, eight U.S. Senators (four Democrats and four Republicans known as the “Gang of Eight”) announced their vision for comprehensive immigration reform and subsequently released the text of their bill entitled “Border Security, Economic Opportunity, and Immigration Modernization Act of 2013”.  The proposed legislation is a broad and far-reaching revision of the nation’s current immigration laws.  This will be the first of several articles to offer detailed analysis on the provisions provided in the bill.  We will begin with the proposed changes for the H-1B visa program.

Under the proposed bill, the H-1B cap will immediately raise from 65,000 to 110,000.  The visas available for U.S.-based advanced degree holders will increase from 20,000 to 25,000; however, there is an additional requirement that these 25,000 advanced degree graduates must be in a science, technology, engineering, or mathematics field.  In total, there will be 135,000 H-1B visas available the first year that the law is enacted compared to the current 85,000.

In addition to the immediate increase of H-1B visas, the bill also contemplates an increase of available visas for future years, with an upper limit set to 180,000 visas per year.  The increase (or decrease) in available visas shall be based on a formula that takes into account the percentage of H-1B petitions that exceeded or failed to meet the cap from the previous year, and a figure based on the percentage of people unemployed in H-1B eligible categories.  The increase or decrease of total available H-1B visas will not exceed 10,000 per year.

There are also several provisions designed to protect American workers. The bill requires that employers pay potentially higher wages for H-1B workers when compared to current law.  Under the current system, there are four levels of prevailing wages per occupational classification.  The bill contemplates only three levels of wages, with the first level determined by the mean of the lowest two-thirds of all wages surveyed for that that particular occupational classification; the second level will be the mean of all wages surveyed; the third level will be the mean of the highest two-thirds of wages surveyed.  This will likely raise the lowest level of prevailing wage and increase the wage values between each level, thus raising the overall salary an employer must pay for an H-1B worker.  Tellingly, in the outline summary of the bill, the Senators describe this new scheme as a way to make employers pay “significantly higher wages for H-1B workers than under current law.”

Additional provisions that would be of interest to our readers is the establishment of a 60 day transition period for H-1B workers to change jobs, thus allowing a reasonable time for someone who is laid off to remain in the United States to find a new H-1B position.  The bill also provides dual intent visas for all students who come here to earn a bachelor’s degree or higher, and spouses of H-1B workers will be allowed to apply for their own work authorization if the country that they are from provides similar treatment of spouses of US workers.

In general, we believe that the H-1B provisions in the proposed bill are a positive development.  However, we are concerned with the requirement that an employer pay “significantly higher wages” than under current law.  Shrinking down the prevailing wage levels from three tiers to four tiers seems overly restrictive and could artificially inflate wages paid to H-1B workers.  If an employer is required to pay such “significantly higher” wages, it could make the recruitment and hiring of an H-1B worker even less desirable than it already is considering the paperwork hassle and thousands of dollars in attorney and filing fees an employer must pay.  We hope that when the final immigration law is passed, this particular requirement is removed and the current prevailing wage system stays in place.

Another important concern that many of our readers have raised is whether this bill would increase the Fiscal Year 2014 H-1B quota for those who did not make the lottery. (As most of our readers are aware, the fiscal year 2014 H-1B cap was exhausted during the first week of availability.)  In the text of the bill, under Section 4101(a)(1)(B), the increase of the H-1B quota to 110,000 shall be effective for the “the first fiscal year beginning after the date of the enactment” of the bill.  This means that if Congress is able to pass this bill with this provision unchanged before October 1, 2013, there will be an additional 45,000 H-1B’s available for the fiscal year 2014 quota.

In our next article we will provide our analysis on the legal immigration (“green card”) provisions of the bill.

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